Europeans are jealous on the American tech builders

We touched a bit last year about the big disconnect between politicians and tech people, and their need to regulate because the politicians are simply too far behind in terms of knowledge and ultimately control of what the tech companies do.

Here’s a little something from what I wrote last summer:

The tech ecosystem has developed tremendously in the past 15 years, in spite of the shitty politics from across both ponds.

That is the very reason for which governments want to regulate Google and Facebook. The gap is so big between the two worlds that the politics is out of control.

More regulation and protectionism will not narrow it down, au contraire, it will force tech to be more creative, they invent things for a living after all. And yes, US is a very different beast than Europe but smart people adapt.

Apart from the money and power plays, it is unclear if the European protectionism is not also about jealousy.

You know, that sort of provincial feeling of being an European decision taker capable of making things happen when seeing that all the interesting tech companies are still coming from the US.

After all, internet regulations from the EU, instead of being focused on the market needs, seem to be dealing in a good part with how American companies are doing business. And it is not really a secret that legislation is made because the Americans are too powerful on the local turf not because, well, there has to be some proper economic incentives so that the market would work efficiently and the consumer would benefit from buying locally more often than not.

And so, I was not too surprised when I read the following:

Clubhouse violates European rules and the requirements of the General Data Protection Regulation (GDPR) are not being met. The entire data protection architecture of the Clubhouse app shows that the service has evidently grown too quickly and does not meet the requirements of the GDPR.

If you don’t know yet, Clubhouse is an audio-based social network launched last April and which raised money pre-everything at $100M valuation a few of months later. Because this is how they do business in the US.

Long story short, Clubhouse exploded in Germany in the past couple of weeks when it also reached the #1 spot in App Store. And it looks like not only VCs are learning from it but also the local authorities are quick to scrutinize them, as per the above quote taken from a data protection officer from Germany and employed by the EU.

The service has evidently grown too quickly - did you get that?

Maybe my German is poor and there’s something lost in translation (zu schnell gewachsen) but uhm, isn’t grow quickly what a startup should do? How quickly is too quickly, is there some sort of EU guidance about it?

Jokes aside, what this guy is seemingly bothered about - Clubhouse is using one of the oldest growth hacking tools in the book: it forces users to share their address book if they want to invite other people into the app. If not, a user can still use the app as he or she pleases.

The service has evidently grown too quickly - did you get that?

Maybe my German is poor and there’s something lost in translation (zu schnell gewachsen) but uhm, isn’t grow quickly what a startup should do? How quickly is too quickly, is there some sort of EU guidance about it?

Jokes aside, what this guy is seemingly bothered about - Clubhouse is using one of the oldest growth hacking tools in the book: it forces users to share their address book if they want to invite other people into the app. If not, a user can still use the app as he or she pleases.

And if you used Clubhouse, you’re quick to see that the permission ask is quite explicit and straightforward, and works like any banal mail marketing tool does before uploading your address book for sending them emails. (i.e. Mailchimp)

I mean, let’s be clear, I don’t like this technique as a user either, but if I don’t, it is my choice not to use the service or its feature anymore, it’s as simple as that. And if I am an idiot and I am spamming all my address book with Clubhouse invites (an edge case but for the sake of the argument) and those recipients deem my invite unuseful and hemce spam, and then reporting me so, then maybe Clubhouse is liable to take action due to people complaining, and if it doesn't, maybe then we have a case of an outside dude to have a look into it and evaluate the situation.

This is how a normal market works, doesn’t it?

The whole thing is still declarative, in the media, and it is also true that maybe this guy has never ever done growth marketing either. [Narrator: he has not].

Not done with the jealousy argument just yet.

Speaking of the EU business understanding the times we live in and the startup/VC business in particular, here’s another quote, from Michael (btw, if you’re into Euro VC and don’t follow Michael yet, you should):

Recently an investment director of a European govt LP told me he thinks GP upside should be capped and that it’s not good for GPs to be too financially successful as it “upsets the balance of things”, and that some US VCs are too successful and powerful.

Too successful and powerful.

Would you be comfortable in your company to work for decisions makers with this type of attitudes? Discuss.

PS. They want to be VCs too.